Professional Liability

Clients who are dissatisfied with the results of a transaction or litigation often look to their lawyers to make them whole. Often times, the lawyer has done nothing wrong, but is looked to as an insurer or deep pocket when another party involved in a deal has engaged in misconduct causing the client’s losses, or when the client simply has a case of buyer’s remorse. Lawyers make mistakes too, but a mistake does not make a case indefensible because the mistake may not have actually been the cause of any damages – a common focus of legal malpractice disputes that CSG has routinely litigated.

Our group is staffed with attorneys that have significant experience defending legal malpractice cases in New York and New Jersey. From time to time, we prosecute legal malpractice cases; doing so strengthens our ability to act as defense counsel by having a better sense of the lawyer’s vulnerability to common plaintiffs’ themes in malpractice cases and how to deal with them. On an as-needed basis depending on the underlying subject matter, we will team up with CSG’s numerous practice groups to ensure a proper and thorough examination of the event out of which the claim originated, as well as an understanding of the applicable law.

Led by CSG’s General Counsel, our Professional Liability Defense Group is also available at our offices or at your offices for presentations on legal malpractice updates in the law, as well as loss prevention techniques – topics on which our professionals have frequently presented.
Ethics Defense and Counseling

Being the subject of an ethics grievance or formal ethics complaint can be a stressful and frustrating experience. The possibility of disciplinary action and sometimes personal feeling of betrayal where you provided quality representation to the client are trying enough. Having to take the time away from your practice to cooperate in the investigation or disciplinary proceeding only aggravates the situation.

CSG has experience at all phases of the disciplinary system in New Jersey, which is overseen by the New Jersey Supreme Court, with the Disciplinary Review Board, Office of Attorney Ethics and volunteer District Ethics Committees throughout the State all charged with investigating, prosecuting and hearing ethics complaints, and/or reviewing recommendations for discipline imposed by hearing panels established by the District Ethics Committees.

In addition to representing those charged with violations of the Rules of Professional Responsibility, we also serve as ethics counsel to law firms or companies seeking advice relating to the Rules of Professional Conduct. We also provide written ethics opinions where appropriate.

Represented an international law firm in connection with a legal malpractice action arising from estate planning and corporate transactional matters. Our client represented a private equity firm in various corporate transactional matters, while other members of the firm prepared an estate plan for a principal of the private equity firm and his wife. Almost 20 years later, after the husband and wife divorced, the wife sued our client claiming that in setting up the estate plan, the firm favored her husband by assisting him in concealing assets and countermanding her express instructions in favor of his wishes, among other claims. The plaintiff alleged that had her estate plan been properly prepared, or had she known what the estate plan actually entailed, she never would have entered into the divorce settlement that she did decades later. The matter involved complicated issues involved in joint representations, almost a dozen experts and alleged damages of more than $20 million. A confidential settlement was reached in 2015.

Represented an international law firm and one of its partners in an action brought by an individual and numerous affiliated entities in one of several consolidated long-running property dispute litigations between individual and another individual defendant, as well as several bank and title company parties, including disputes over ownership of various properties. Plaintiffs asserted claims of slander of title, tortious interference and fraud against the law firm and partner arising from their representation of a holding company and its owners in connection with the holding company’s purchase of assets in the bankruptcy of the individual defendant and other affiliated debtors. Plaintiffs alleged that the law firm and partner intentionally interfered with their interests in the properties that were subject of same. Co-defendant banks and financial institutions filed cross-claims against numerous co-defendants, including the law firm. The litigation involved complicated bankruptcy and property interest issues and involved the interplay between several individuals, entities, banks and title companies. A confidential settlement agreement was reached between the plaintiffs and the law firm and partner prior to the lengthy bifurcated bench trial concerning the ownership of the various properties at issue and the plaintiffs’ various tort claims.

Represented a regional law firm in a malpractice claim arising out of its representation of a holding company and one of its owners in the sale of its shares to two entities. The transaction involved a complicated structure that was tax-driven. The IRS later questioned the validity of the purchase as an intermediary transaction tax shelter and pursued collection on outstanding taxes owed by the holding company. After the purchaser failed to pay the taxes, the IRS pursued collection from the holding company’s owners personally under a theory in the Tax Code known as transferee liability. We learned through our investigation that the purchaser had been sued in multiple jurisdictions for engaging in the same type of conduct and, in fact, was part of a massive fraud that was the subject of a criminal indictment and multiple contested cases in the U.S. Tax Court. In addition to involving sophisticated corporate and tax issues concerning the underlying representation, the case involved important policy issues presented in legal malpractice cases, including issues peculiar to New Jersey law. The parties reached a confidential settlement in 2015.

Represented a regional law firm in a malpractice claim arising out of its representation of certain individuals and their closely held companies in multiple matters over a sixteen-year period. Most significant was our client’s representation of one of those companies referred to in connection with an environmental clean-up on land it owned and had contaminated over several decades. This matter involved complicated environmental issues concerning environmental remediation, regulations and the differences between both prior NJDEP practices concerning remediation oversight dating back to the mid-1990s, and the current process of using Licensed Site Remediation Professionals as the pace at which the clean-up was conducted was a significant issue. Another critical issue was examining the role of attorney versus consultant in matters that involve both engineering tasks coupled with regulatory compliance issues, and what the client’s expectations are from both engineer and attorney (and how to delineate those distinctions from a loss prevention perspective). A confidential settlement was reached in 2016.

Represented a New Jersey law firm in a malpractice action arising out of its representation of affiliated entities (the “Entities”), which purported to be in the business of purchasing, renovating and renting out multi-family homes. Our client prepared offering memoranda to be circulated to potential investors to purchase ownership interests in the new companies. The founders allegedly advised our client at the outset that the Entities’ main principal had previously been convicted of securities fraud and was barred from offering securities. Our client did not disclose this fact in the offering memoranda. The Entities allegedly turned out to be a Ponzi scheme by which its main principal allegedly defrauded its hundred-plus investors out of approximately $22 million. A receiver was appointed for the Entities, and, on behalf of them, the receiver sued our client and other law firms that had provided legal services to the Entities for legal malpractice and had rendered them liable to the investors. In addition to involving highly voluminous documents and witnesses located around the country, the related cases involved numerous challenging legal issues, including conflicts of law inasmuch as the litigations were all pending in New York but involved a New Jersey firm. In fact, at least at the outset of the case, the New York law firms obtained different results from our clients based on the differences in application of law. The parties reached a confidential settlement in 2013.